HMV: Big screen & big ambitions

HMV has introduced a movie cinema above its Wimbledon outlet, dubbed HMVCurzon – yet another sign of its rapidly evolving strategy.
Tim Ingham catches up with the firm’s boss, Simon Fox…

How do games companies stand to benefit from HMVCurzon?
The cinema features the latest digital technology and has wireless capability, so we’ll be able to stage gaming events and tournaments tied in to key releases. It has three screens and is a very versatile space, which means we can respond to popular demand and to stage special events not typically associated with cinemas.

Also, the existing store below has been refurbished and games have been given more space – occupying much of the first floor, which is only just below the cinema.
If the concept proves successful, as we firmly believe it will, we will look to roll it out to other key HMV locations – some of which may well include a Gamerbase online gaming offer. We can well imagine synergies between the two.

Are there any plans to put games content on-screen?
Aside from gaming events, we also want to work with our games partners to offer special previews of major games before they come out. The cinema will give us the option of doing this in high quality vision with surround sound – and let’s not forget 3D, which is bound to become huge for games in due course. Imagine how cool that would be? People could gain access as competition winners or, more likely, as members of our PureHMV rewards scheme.

Can games publishers advertise through the innovation?
They’ll probably want to build up more of a connection first, but there’s no reason why they shouldn’t be able to include the cinema for their games promotion – especially once we begin to roll it out to major city centre locations.

We’ve heard a lot about HMV becoming an ‘entertainment content hub’ – and moving away from recorded product. If I were a publisher, should I be worried?
We’re not moving away from recorded product as such – but it is gradually moving away from us. The way people are discovering and consuming music, films and games is changing, and the market necessarily has to adapt with this long-term trend.

There is, of course, still a viable and resilient market for ‘packaged media’ out there, but it’s important we diversify and broaden our offer to customers by tapping into popular culture in a much wider sense.

Increasingly we see ‘live’ as being a growing part of this – hence our support of Gamerbase and our recent acquisitions of music venues such as the renamed HMV Hammersmith Apollo. The joint venture with Curzon AE represents a continuation of this thinking.

What will HMV look like in ten years’ time? Can you see a day when HMV doesn’t actually sell any recorded product? How far away is that?
Ten years is quite a long time off to predict with a degree of accuracy, especially as the rate of change in our consumption patterns can only accelerate, but I’m very optimistic the HMV brand will still be represented on our High Streets.

However, by then I trust our stores will have been transformed away from being one-dimensional retail outlets, selling just packaged media, and are more likely to be entertainment hubs in a much wider sense catering to a broad range of demands and offering access to music, film and games in all its forms – including a greater focus on the live experience, such a Gamerbase. Such hubs will work in tandem with our music and other live venues.

What will the High Street look like in a decade?
Assuming supermarkets haven’t entirely taken over by then, it probably won’t be too different to what we have now in many cases – people will still want specialist stores for clothes, homeware, and so on, whilst there will always be a demand for cafes, restaurants and bars.

However, the one key area where there is likely to be the most change is home/mobile entertainment and communication – as this is where the cutting edge of technology is having its most pronounced effect.

It’s the area that is most sensitive to consumer aspirations, and as these aspirations change the entertainment market will have to evolve with them. That’s why we believe our stores will evolve into more of what you might term hubs for popular culture in all its forms.

Would you say HMV is embracing the ‘digital revolution’ – rather than running from it?
Absolutely. There was a time we were merely responding to the ‘digital revolution’ – and not always that well either – but I firmly believe we are now playing a bigger role in helping to shape this change.

We may not have the leverage of an Apple or a Google, but our recent acquisition of a 50 per cent stake in digital serviced provider 7digital shows that we are serious about become a key player.

Have you furthered your discussions/plans with 7Digital to include games via your joint service?
Not yet, as there are some more basic digital issues we need to address before this, but games will be on the agenda at some point in the not too distant future.

How is Re/Play performing for you? Will pre-owned make up more of a percentage of your revenue in future?
Really well – Re/play has comfortably matched our expectations, and, as a retail and marketing operation, it’s worked very well in-store. Given that games content probably hasn’t had the same depth of more recent years, it’s been a bit of a bonus to have it, and, of course, the added-value it presents to customers in these recessionary times has gone down well.

What is your view of the super-low supermarket pricing on new releases this year (FIFA for 25)? Is it worse than ever?
It’s probably best not to say what I really think… but the way that music and DVD products have become devalued in recent years in consumer perceptions and aspirations should act as a salutary warning to the games business.

Of course, it’s important that games, like any other products, should be competitively priced and be seen to offer value to customers. But, at the same time, there should be a continuing acknowledgement of the huge investment that goes into games from publishers and distributors alike, and it’s important that consumers continue to see games as being desirable.

Do you think HMV will benefit from the postal strike – as footfall increases from worried would-be online consumers?
Obviously, we hope that it will be resolved soon, but in the meantime, we’ll do all we can to manage our customers’ online requirements – but encouraged in the knowledge that, unlike pure online retailers, we have nearly 300 stores around the country that they can also visit for their gift purchases this Christmas.

Do you have any plans for expansion in the UK in the next 12 months? What about your temporary HMV Christmas stores? Are you still pressing ahead with these?
There are no significant plans for expansion in the next 12 months, as we have expanded quite a bit this year already.

We have taken on around 30 former Zavvi sites, for example. We are also experimenting with ten ‘pop-up’ shops on short leases for the holiday season – we felt it was important to extend a specialist entertainment offer this Christmas to towns that don’t currently have one.